EDITORIAL: Self-serve kiosks, McDonalds and Nevada’s minimum wage

It’s hard to deny that the expansion of such technology, particularly in low-margin retailers, isn’t a defense mechanism against higher pay mandates.

Las Vegas Review-Journal

March 23, 2017 - 9:00 pm

Bizuayehu Tesfaye/Las Vegas Review-Journal Follow @bizutesfaye

All those progressives clamoring for Nevada to outlaw more jobs by increasing the minimum wage to $15 should head down to the McDonald’s on Sunset Road and Durango. No, they don’t have to indulge The Man by trying a Big Mac or Quarter Pounder. Instead, they should just check out the new self-service kiosk.

It’s the first of its kind in the state. But it won’t be the last.

“It’s the modern age,” the store’s owner, F. Ronald Smith, told the Review-Journal this week. “It was important to me that we be at the forefront with this technology.”

Mr. Smith owns 13 McDonald’s restaurants in the Las Vegas area. He insists the kiosks will not replace human workers. Perhaps. But it’s hard to deny that the expansion of such technology, particularly in low-margin retailers, isn’t a defense mechanism against higher pay mandates.

In a piece last year for Forbes magazine, former McDonald’s CEO Ed Rensi predicted that “union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real.”

Skeptics may argue that automation is inevitable, regardless of the wage floor. They have a point — business are constantly looking to improve service and efficiency and machines don’t show up late or call in sick.

But the push to double the minimum wage has accelerated the process and led some industries that might have otherwise eschewed automation to investigate its advantages.

“Like their Soviet-era predecessors who foolishly thought they could centrally manage prices and business operations to fit an idealistic worldview,” Mr. Rensi writes, “economic reality keeps ruining the model of all gain and no pain.”

And economic reality is on full display at the McDonald’s near Sunset and Durango.